ST.

VINCENT’S COLLEGE INCORPORATED

Ground Floor, Millennium Building, Main Campus, Padre Ramon Street, Estaka, Dipolog City 7100 Philippines
w w w. s v c . e d u. p h | ( 0 6 5 ) 2 1 2 - 6 2 9 2 | | F a x # 9 0 8 - 1 1 3 3 s v ci _ 1 9 1 7 @ s v c . e d u . p h
_______________________________________________________________

COMPREHENSIVE EXAMINATION FOR MASTER IN BUSINESS

ADMINISTRATION
AY 2020

I. MBA 227 - Organization Development

A. ESSAY

1. Differentiate human resource intervention and techno-structural intervention.

2. How Industry 4.0 changes the landscape of every business organization?
3. Discuss value based organization development and restructuring organization.
4. Discuss why people resist change in the workplace?
5. Discuss why OD (organizational change) is inevitable?
6. Leading and Managing Change
7. Human Resource Intervention
8. Power and Politics
9. Organizational Climate and Image

B. Case Analysis
CREATING A VISION AT PREMIER

Premier is a leading health care alliance collectively owned by more than 200 independent
hospitals and health care systems in the United States. Together, the owners operate or are
affiliated with nearly 1,500 hospitals and other health care sites. Premier resulted from the 1995
merger of Chicago-based Premier Health Alliance, San Diego-based American Healthcare
Systems, and The SunHealth Alliance of Charlotte, North Carolina. Premier offers a
comprehensive array of services and products through its companies and business units, including
group purchasing, consulting services, technology management services, insurance services,
benchmarking and market intelligence services, and legislative advocacy.

Two and a half years after the organization’s formation, a comprehensive organizational
assessment suggested that Premier had not been successful in establishing a common
organizational culture. Many of its services and employees continued to operate in a fractured or
isolated fashion relating largely to their prior organization and its geographic location. As a
result, Premier’s strategy and business model were poorly understood, and more importantly, not
well implemented. The assessment pointed to a growing lack of trust in the organization. Premier
executives conceded that the organization was culturally adrift and without a well understood or
widely accepted sense of direction.

Another key finding of the assessment concerned the organization’s vision. Shortly after the
merger, a new set of values, mission, and vision statements had been developed. The statements
themselves were clear and compelling; however, they had been developed by a relatively small
group of executives. At best, most employees did not feel much ownership of the values; at worst,
they saw the failure of top management to behave consistently with the values as evidence that
they were not trusted, supported, or important.

In the fall of 1997, Premier hired Richard Norling as COO. Norling had been a chief executive at
one of the health care systems that owned Premier, and his arrival signaled the potential for
change and new possibilities. At his former organization, Norling had initiated and sustained a
comprehensive OD effort, based on identifying core organizational values and the behaviors that
supported them. The experience of that health care system had demonstrated that core values
shaped and accepted by an organization’s employees could build a deep sense of community in
the organization, and lead to greater levels of trust and commitment that could be harnessed to
enhance organization performance and effectiveness. Given Premier’s emerging problem, a
similar approach made sense.

In the spring of 1998, Premier executives determined to address these issues by building on the
values and mission statements that had been developed earlier. Their intent was to involve a large
number of employees in validating Premier’s values, specifying the behaviors that supported
them, and identifying ways in which the values could be integrated into the routines and
processes of the organization—all of which would (they hoped) infect the organization with a
renewed sense of identity and enthusiasm.

The first step in Premier’s change process was planning and conducting a three-day 200-
employee values conference. The conference was designed by a team of employees representing a
diagonal slice of the organization and assisted by an OD practitioner. At the conference,
employees examined Premier’s business model and their organizational culture; developed and
recommended a set of core organizational values for the organization; crafted an envisioned
future; and identified and proposed strategies for employee involvement, integration, and
organization transformation companywide.
Following the conference, the team of Premier employees who had planned the meeting was
asked to become a permanent committee, charged with refining and implementing plans and
recommendations that the conference participants had generated. Ultimately, input was obtained
from over 60% of the workforce and 16 actions were recommended and approved by senior
management. Some of those actions included:
> Incorporating the values into Premier’s performance management/performance appraisal
system
>Incorporating the values into the recruitment and selection process by developing sample
interview questions for use by hiring managers aimed at helping them learn whether prospective
employees would be a good match to Premier’s organizational culture.
>Instituting an annual meeting of approximately 200 employees from all parts of Premier
modeled after the 1998 values conference. The agenda should be focused on business issues,
strategy, and organizational culture and values. Rotate those invited so that every Premier
employee has an opportunity to attend every three to five years.

Answer the following:

1. Gather and organize all data relevant to the case, and in particular the topic of focus for the
study relative to OD.
2. Develop a narrative in which summarizes the key information about the topic of focus where
here possible include feedback from programme participants.
3Make discussion and comparison relative to the OD literature/topic to identify themes and
patterns of the case.

II. MBA 226 - QUANTITATIVE TECHNIQUES FOR BUSINESS DECISIONS

A. Linear Programming - GRAPHICAL SOLUTION

1. SVCI Polar Products makes downhill and cross-country skis. A pair of downhill skis
requires 2 man-hours for cutting, 1 man-hour for shaping and 3 man-hours for finishing
while a pair of cross-country skis requires 2 man-hours for cutting, 2 man-hours for
shaping and 1 man-hour for finishing. Each day the company has available 140 man-
hours for cutting, 120 man-hours for shaping and 150 man-hours for finishing. How
many pair of each type of ski should the company manufacture each day in order to
maximize profit if a pair of downhill skis yields a profit of $10 and a pair of cross-
country skis yields a profit of $8?
2. You’re on a special diet and know that your daily requirement of five nutrients is 60
milligrams of vitamin C, 1,000 milligrams of calcium, 18 milligrams of iron, 20
milligrams of niacin, and 360 milligrams of magnesium. You have two supplements to
choose from: Vega Vita and Happy Health. Vega Vita costs 20 cents per tablet, and
Happy Health costs 30 cents per tablet. Vega Vita contains 20 milligrams of vitamin C,
500 milligrams of calcium, 9 milligrams of iron, 2 milligrams of niacin, and 60
milligrams of magnesium. Happy Health contains 30 milligrams of vitamin C, 250
milligrams of calcium, 2 milligrams of iron, 10 milligrams of niacin, and 90 milligrams
of magnesium. How many of each tablet should you take each day to meet your
minimum requirements while spending the least amount of money?

B. FORECASTING – Exponential Smoothing and Least Square Method

3. Thinking Tools Services assembles customized personal computers from generic parts.
Formed and operated by part-time SVCI students Paulette Cruz and Maureen Luis, the
company has had steady growth since it started. The company assembles computers
 mostly at night, using part-time students. Paulette and Maureen purchase generic
computer parts in volume at a discount from a variety of sources whenever they see a
good deal. Thus, they need a good forecast of demand for their computers so that they
will know how many parts to purchase and stock. They have compiled demand data for
the last 12 months as reported below.

Period Month Demand Period Month Demand

1 January 17 7 July 20
2 February 21 8 August 18
3 March 19 9 September 22
4 April 23 10 October 20
5 May 18 11 November 15
6 June 16 12 December 22

a. Use exponential smoothing with smoothing parameter α = 0.2 to compute the demand
forecast for January (Period 13).
b. Use exponential smoothing with smoothing parameter α = 0. 5 to compute the demand
forecast for January (Period 13).

c. Paulette believes that there is an upward trend in the demand, the initial forecast is 37
and the trend over this period is 0 units. Use trend-adjusted exponential smoothing with
smoothing parameter α = 0. 5 and trend parameter β = 0. 2 to compute the demand
forecast for January (Period 13).
d . Compute the mean squared error for each of the methods used.

4. Eddie’s Restaurant collected the following data on the relationship between advertising
and sales at a sample of five restaurants:

Advertising Sales ($1000s)

Expenditures ($1000s)
1 19
4 44
6 40
10 52
14 53

a. Let x represent advertising expenditures and y represent sales. Use the

method of least squares to develop a straight-line approximation of the
relationship between the two variables.
b. Use the equation developed in part (a) to forecast sales for an advertising
expenditures of $8000.

C. Break-even Point Analysis

5. A manufacturing business that is involved in manufacturing and selling a single product.
The annual fixed expenses to run the business are $15,000 and variable expenses are
$7.50 per unit. The sale price of your product is $15 per unit.
a. Formulate the total revenue (TR), total cost (TC) and profit (P) functions
b. Find the break-even point quantity and revenue
c. Find the number of units to sell if the estimated profit is $50,000.
d. Find the total profit if the total units sold is 5,000 units.
 e. Find the units to sell to break-even the fixed expenses.
6. It costs a publishing company 50,000 dollars to make books. The 50,000 is a fixed cost or
a cost that cannot change. To help the publishing company sell the books, a marketing
company charges 4 dollars for each book sold. If the company charges 9 dollars per book,
how many books should they sell to break even?
7. A manufacturing company supplies its products to construction job sites. The average
monthly fixed cost per site is $4,500, while each unit cost $35 to produce and selling
price is $50 per unit. Determine the monthly breakeven volume.
8. A store sells t-shirts.  The average selling price is $15 and the average variable cost (cost
price) is $9.  Thus, every time the store sells a shirt it has $6 remaining after it pays the
manufacturer.  This $6 is referred to as the unit contribution.
a. Suppose the fixed costs of operating the store (its operating expenses) are $100,000
per year.  Find Break-even in units?
b. If the owner desired a profit of $25,000, what will be break-even point in dollars?
c. If fixed costs rose to $110,000, break-even in units volume would be?
d. If the average selling price rose to $16, break even volume would fall?

III. MBA 225 - FINANCIAL MANAGEMENT

A. Financial management terminologies – definition and example

1. Cash Management
2. Inventory Management
3. Accounts Receivables Management
4. Capital Investment Decisions
5. Merger and Consolidation
6. Risk Management
7. Financial Restructuring
8. Downsizing and Benchmarking
9. Cost of Capital
10. Strategic Financial Management
11. Financial Control
12. Budgetary Control
13. Benchmarking
14. Initial Public Offering (IPO)
15. Lease Investment
B. Cost-Volume Profit Analysis (CVP)
1. The controller of Mix Company has prepared the following projected
income statement:
Sales (72,500 units @ $80) $5,800,000
Less: Variable expenses 3,480,000
Contribution margin $2,320,000
Less: Fixed expenses 1,600,000
Operating income $ 720,000
 a. Compute the break-even point in units using:
a. Operating Income Approach
b. Contribution Margin Approach
c. Target Income as a Peso/Dollar Amount
b. If Mix Company wants to know the number of sanders that must be
sold in order to earn a profit equal to 15 percent of sales revenue. Find
the break-even point in units.
c. If Mix Company wants to achieve net income of $975,000 and its
income tax rate is 35 percent. Find the break-even point in units.
2. Michael’s Bridal Shoppe sells wedding dresses. The cost of each dress is
comprised of the following: Selling price of P10,000 and variable
(flexible) costs of P4000. Total fixed (capacity-related) costs for Michael’s
Bridal Shoppe are P900,000.
a. What is the contribution margin per dress?
b. What is the Michael’s Bridal Shoppe’s total profit when 200 dresses are
sold?
c. How many dresses must Michael’s Bridal Shoppe sell to reach the
breakeven point?
d. How many dresses must Michael’s Bridal Shoppe sell to yield a profit of
P600,000?

C. Case Analysis
From the given cases, identify and list down the financial challenges presented on
the case and give financial management intervention for each of the
corresponding challenges/problems.
Case 1: The X Company suffered from cash flow issues caused by rapid growth,
undercapitalization, and lack of financial management expertise and control processes.
The X Company accumulated excessive losses and struggled with liquidity issues that
threatened the company’s future viability. They had grown too rapidly and lacked
processes and working capital to fund their success.

Case 2: Sales were beginning to grow rapidly and the company was in need of a clear,
concise mechanism for reconciling sales per the company website to the back gateway
and bank.

Case 3: The Z Company needed to raise considerable equity capital to fund the
continuation of their product development and their sales and marketing efforts.
Previously, the Z Company had raised limited capital from local Angel investors, but
now needed to attract sophisticated institutional investors. This was the first time the
CEO had headed a venture-backed start-up company and he needed prudent business
counsel to avoid the typical pitfalls of a young company.

Additionally, the company’s daily bookkeeping was being handled by an administrative

assistant with little accounting experience. Accounting records were inaccurate and
incomplete. The CEO was understandably concerned that his accounting records would
not pass the rigorous due diligence conducted by the new institutional investors.
IV. MBA 403 - ENTREPRENEURSHIP

A. Description of the following

1. Aspects of Feasibility Study
2. Elements of Good Feasibility Study
B. Problem
In 2015, SVC Inc. (a hardware retail company) sold 10,000 units of its product at
an average price of $400 per unit. The company reported estimated Returns and
allowances in 2015 of $200,000. SVC actually purchased 11,000 units of its
product from its manufacturer in 2015 at an average cost of $300 per unit. SVC
began 2015 with 900 units of its product in inventory (carried at an average cost
of $300 per unit). Operating expenses (excluding depreciation) for SVC, Inc. in
2015 were $400,000 and depreciation expense was $100,000. SVC had
$2,000,000 in debt outstanding throughout all of 2015. This debt carried an
average interest rate of 10 percent. Finally, SVC’s tax rate was 40 percent. SVC’s
fiscal year runs from January 1 through December 31. Given this information,
construct SVC’s 2015 multi-step income statement.

C. CASE ANALYSIS

Case 1 : The Y Co. needed to raise its first institutional round to complete initial animal studies.
The co-founders completed a draft of a presentable Business Plan, but early investor feedback
indicated that the financial projections were unrealistic and unacceptable. The financial
presentation needed to clearly demonstrate the use of capital and what additional capital
requirements would be required upon successful completion of the animal studies. The Y Co. did
not have the experience to undertake this financial presentation and had limited resources to
engage an experienced full-time Chief Financial Officer (CFO).
1. Identify and list down the challenges/problems of the company.
2. Give financial/entrepreneurial intervention of the identified challenges.

Case 2 : Answer the following question on each of following business situation.

1. Products or Services are being sold? Describe in detail.

Case 2.1: Frame Destination manufactures a line of picture frames that are focused more on
digital photos than other types of art. When they formed in 2004 there was not as many
choices for digital photos as there now are. Over the years their product line has expanded
and they now manufacture a wider line of frames with more size and material and mat
options than in the early years. The business has also added sales of a variety of supplies that
individuals may need when they purchase frames, along with a patented special carrying
pouch made from bubble-wrap that is ideal for artists who go to trade shows to sell their
wares.
2. What was the initial vision or thought or motivating circumstances that triggered
the business?
Case 2.2: Mark was an amateur photographer and was taking advantage of new technology
that allowed him to print his own prints at 13×19 and he Google 13×19 picture frame and
there were lots of results for people selling prints but none for frames. That prompted the idea
that other people may have the same problem and maybe he could solve the problem. It
became obvious that this was a very popular size therefore the opportunity to build a business
was huge. All stores are selling 13×19 paper he just assumed that the opportunity was there.
Essentially, he felt that the risk vs potential for success was within reasonable parameters so
he got started.

3. What is the Mission statement? Vision Statement?

Case 2:3: Frame Destination Inc. strives to achieve the highest customer satisfaction possible.
Our goal is perfection in all our products and harmony in all of our business relationships. 
We believe a picture frame is more than just fashion; it’s a safeguard for something you love. 
Frame Destination is committed to providing top notch customer service and the highest
quality of workmanship.

4. When was the business formed?

Case 2:4: Frame Destination was started in 2004 in the garage of the Founder, Mark Rogers.
After about 18 months the business took over not only the garage but much of the interior of
the town house where Mark and his wife live and they needed to get a true business space. In
late 2005 Frame Destination moved to a 1500 sq.ft. facility near Texas Instruments. In 2006
the business expanded to take in another 1500 sq.ft. of space, increasing to approx. 3,000
sq.ft. and about 3 full time employees.  In 2008 the business moved to a larger 5,000 sq.ft.
space around the corner. In 2010 the business took in additional space and currently have
nearly 11,000 sq.ft. and approximately 14 full time employees.

5. What are the Key Factors of Success?

Case 2:5: Rapid manufacturing and delivery of a high quality product are the primary Key
Success Factors. The convenience of a fully automated online ordering system which is user
friendly is another Key Success Factor. Over the years the online system has been one of the
major capital investments made by the company. Each time the system is improved and
becomes easier for customers to order products sales increase as a result. Naturally, with
something as complicated as manufactured frames that are shipped in either a completed or a
‘to-be-assembled’ format some customer service issues are to be expected. Customer service
is provided by highly skilled staff and a great deal of effort goes into making sure that the
products are easy to assemble when they arrive to the customer premise.

6. Who are the competitors? List at least 5 competitors and compare each (in detail) to
the company being interviewed.
Case 2.6: PictureFrames.com – significant competitor because they have one of the oldest,
largest and best recognized. They have the best SEO. Their prices are higher and they are not
direct competition.
AmericanFrame.com – most significant competitor because they have been in business about
40 years. They are about 5-10 times larger with about 150 employees and about 50,000 sq.ft.
or larger so their economies of scale give them a cost and process advantage. They used to be
mail-order before they became online so they had lots of systems and processes that have
been mature for a long time. The also have a similar product line and pricing model.
Framesbymail.com – lower quality supplier, not quite as good of a website for the user,
higher priced. FramingSupplies.com – tend to more of the full sheet mats versus cut mats so
they are a little more into the DIY market than the finished goods market. They only encroach
on FD’s space in a minor way. FrameFit.com – similar in pricing and product mix but not
highly visible in the online photography forums.

7. What competitive advantage, if any, does the entrepreneur enjoy?

Case 2.7: Manufacturing frames in an online environment requires many different process
steps which must all work together to deliver a high quality end product. The investment in
software systems is a critical component, however, there must also be an investment in
equipment, inventory, inventory control, employee training, and order fulfillment processes.
Each of these investments are significant. Equipment that can operate at a high volume and
produce low cost per unit finished goods often costs in excess of $50,000 per machine, and
there are quite a few of these machines needed to fully equip the facility. The software
investment alone is several hundred thousand dollars. Having made these investments means
that the business is one where new competitors will have a difficult time overcoming the
financial barrier to entry. Having a solid reputation that generates significant repeat business
a customer referrals also means that the business has a competitive advantage in a proven
process for producing goods and services which customers appreciate and which competitors
will find difficult and expensive to copy.

8. What competitive and environmental threats does the entrepreneur face?

Case 2.8: Frame Destination one of well over a dozen established competitors. Some are
much larger and have corporate organizations that have synergies with the frame
manufacturing business unit with which Frame destination competes. Some of the
competitors are also manufacturers of mat paper and mat-boards and other frame raw
materials such as metal stock and wood stock used in the frame products. These additional
products represent sales that help the competitors to have a lower overall cost of production.
New technologies include more efficient computerized frame manufacturing equipment that
lowers to cost per unit and improves the resulting quality. New entrants into the field have the
benefit of purchasing such equipment at a time when Frame Destination is still having to
amortize investments in older technologies. New entrants into the business can focus on sub-
segments of the market and produce a limited range of products at a lower cost and this
represents a significant threat. The entire business is located in a single location and a fire or
natural disaster such as a tornado would be catastrophic to the point where the business may
be unable to recover.

9. What goals has the entrepreneur established?

Case 2.9: Mark has established financial targets for the business that have been met and
which continue to push the business to ever higher levels of sales. One specific goal is to
have the business be debt free within the next 12 months. Another goal is to have the business
so well organized that Mark and his wife can take vacations of 7 – 10 days in length without
fear that they business will suffer while they are out of the office.

10. Is the entrepreneur succeeding at accomplishing their goals?

Case 2.10: Mark is accomplishing his goals, however, each time the business grows to a new
level many changes are required. The changes include increased debt load, employee
turnover, and supplier relationships that have to be renegotiated. Goals that are accomplished
often come with problems that are generated that were unanticipated and that need to be
overcome. Mark is making progress towards the goal of having the office run efficiently
while he is out on vacation or business related travel.
11. How could the entrepreneur improve their business?
Case 2.11: One of the main difficulties that the business deals with is financing. Providing a
good quality source of long term capital is proving to be a challenge. Improvements to the
financial statement ratios that banks look for will take time and until then long term
traditional bank financing may be difficult to secure. Paying down debt and improving capital
reserves is a crucial step in improving the business.

12. Why did you choose this entrepreneur?

Case 2.12: I chose this Entrepreneur because I felt that he has demonstrated a good growth
rate and an impressive story of success in a competitive market. The Entrepreneur was not
formally trained in business but managed to succeed through organization and careful
planning. All funding was accomplished by use of personal credit cards and lines of credit
which is generally considered a bad way to proceed, however, in some cases it works. Mark
has managed to use this unconventional financing source to his advantage and managed to
keep his cash flow sufficient to pay off the debt as it has arisen.

13. What marketing is the entrepreneur using? Is it effective? Do you recommend other
choices?
Case 2.13: Frame Destination relies primarily on a combination of SEO and Forum
participation. A small amount of money is spent on PPC marketing. There are a number of
discussion forums for photographers and Frame Destination is very active in such groups and
has been for many years. The groups are the initial way that Frame destination grew.

14. Explain why you think this business will succeed, struggle, or fail over the next 2
years.
Case 2:14 Mark has proven to be a very resourceful business owner. His business is now well
enough established that he will be able to overcome normal obstacles. The only real threat to
his business is an environmental threat such as a fire or tornado. Otherwise, so long as Mark
continues to be actively involved in the business the business should survive indefinitely into
the future.